Category: Business Daily

In the wake of tough economic times, many employers have been forced to restructure their businesses, reduce their workforce, or shut down entire operations.

For many people, appearance of a redundancy notice can truly turn their world upside down as it suddenly takes away your job.

While a severance cheque may come with short-term financial relief, redundancy often signals a major career disruption and financial uncertainty. The Employment Act, 2007 defines redundancy as a situation where an employee loses a job involuntarily, typically due to the employee’s role or services becoming unnecessary, often as a result of structural, technological, or other changes within the organisation.

Understanding the legal and tax obligations involved in the redundancy is crucial for both employers and employees.

Compliance with the law ensures that rights and responsibilities of parties involved are upheld and help mitigate potential intervention from the courts or other authorities, if due process is not observed.

Before an employer can lawfully declare redundancy, they must follow a specific procedure outlined in the Employment Act.

Failing to observe any of the specified steps could render the entire process illegal and expose the company to lawsuits or compensation claims.

First, if the employee is a member of a trade union, the employer must inform both the union and the labour officer in charge of the area of the reasons for, and the extent of, the intended redundancy at least one month before termination.

If the employee is not in a union, the employer must notify the employee directly in writing and also inform the labour officer.

When deciding which employees will be affected by the redundancy, the employer must use fair and objective criteria. These include the employees’ tenure, their skills, their performance, and their reliability. Courts require employers to document and justify the selection criteria used. Importantly, employees must not be treated unfairly because of their union membership status. Whether or not an employee belongs to a union should not affect the terms of separation.

The employer must pay for pending leave days, give at least one month’s notice or one month’s salary in lieu, and severance pay of at least 15 days’ wages for every full year worked. More generous packages may be offered under contracts or internal policies.

While the Employment Act does not explicitly require consultation, Kenyan courts have emphasised the importance of genuine consultation with affected employees or their representatives. Failure to consult may render the redundancy process procedurally unfair.

While severance pay is intended to alleviate the impact of the sudden loss of income and provide a financial buffer while the employee seeks new employment opportunities or undergoes retraining, the compensation is not tax-exempt in Kenya.

Under the current tax laws, pay received by an employee upon termination is taxable, unless the individual qualifies for specific tax privileges granted by applicable laws.

The methodology for calculating tax on severance pay is determined based on the provisions of the employment contract and follows the procedures set forth in the Income Tax Act.

Employers are required by law to withhold the appropriate taxes and deductions from severance pay prior to issuing the final cheque to the employee.

Inaccurate or incomplete compliance with these requirements may result in penalties from the authorities and potential legal action from employees or their unions.

In a period of rising job losses and corporate restructuring, it is essential for employers and employees to have a clear understanding of the legal and tax consequences associated with redundancy.

For employers, strict adherence to the law is not only a statutory requirement but also fundamental to maintaining trust and fairness during transitions.

Employees should also familiarise themselves with the provisions of the law and consult with qualified legal or tax professionals as appropriate.

So, don’t wait until the cheque clears to ask questions. Whether you’re an HR professional or an employee, understanding your rights and responsibilities is paramount.

If you asked Addis Alemayehou where to put money between Kenya and Ethiopia, his answer would depend on the size of the cheque. The seasoned entrepreneur, who has invested in both markets, believes scale is everything.

‘If you gave me Sh100 million, I would bet it on Ethiopia. You can call me biased, but I’d rather go for a market of 130 million people than one of 50 million or 60 million people. The potential for growth is much higher. Ethiopia’s economy has been growing faster than Kenya’s. We caught up, and now we’re ahead. A giant has awakened next door, and it’s not going back to sleep. For Sh10 million, however, I’d put that in Kenya, it’s competitive, but with the right niche, you’ll still thrive,’ he tells BDLife.

Three former managers of the National Bank of Kenya (NBK) have been acquitted by a Nairobi court of charges of fraudulently clearing six companies’ loan arrears totalling to Sh1.056 billion.

Milimani magistrate Gilbert Shikwe quashed the charges brought against George Weke Jaba (chief credit officer), Bonface Amunga Biko (executive director corporate banking), and Dennis Chumbe who was the head medium business.

The Executive is petitioning Parliament to repeal a tax on clinker importation, revealing huge disruptions it has caused in the steel and cement industries since its introduction two years ago.

Trade Cabinet Secretary Lee Kinyanjui says the Executive is taking action after observing the impacts the levy has had on the operations of companies in the steel and cement sectors.

Tea produced in Rwanda and Burundi suffered the sharpest fall in prices at the weekly regional auction in Mombasa over the first eight months of 2025 amid overall subdued demand from buyers, which is likely to trim farmers’ earnings this year, analysis showed.

Data showed that the average price from Rwanda stood at $1.61 (Sh208.07) over the first eight months of 2025, compared to $2.84 (Sh367.04) in a similar period, marking a 43.3 percent drop, which is the sharpest among countries trading at the regional auction run by the East African Tea Trade Association.

Africa’s youth have, over the years, been referred to as the continent’s untapped potential. This framing is common in reports and political speeches in Kenya, where 85 percent of the population is below the age of 35.

However, the truth is that young Africans do not stand on the fringes. They are already creating the future, innovating technologies, disrupting industries, and driving social change.

What is now needed is a strong commitment to ensuring that the youth have the environment and resources needed to tap into their power, a commitment that African governments must make now.

So how do we unlock this power?

There are key elements that must be unpacked, no matter how uncomfortable they make us. It is in this discomfort that we can start to actualise Africa’s great future. It is paramount that the trust deficit between citizens in multiple African countries and their governments is addressed first.

We cannot build on a rocky foundation, and the youth, especially, do not trust their governments. This trust will be rebuilt on the delivery of services, on an accountability that honours enquiries from the youth instead of punishing them when they demand a just government.

Governments must start seeing the youth as capable partners in building Africa’s future and solving global problems.

A testament to this is Wawira Njiru. At just 21, she founded Food for Education, which ensures students get access to nutritious meals at school. Their work is efficient and leverages technology, too. She has gone from serving 25 students to serving 500,000 children daily across Kenya. The schools she supports have seen a 27 percent increase in enrolment.

Additionally, national policies must not only incorporate youth insights but must have a tangible impact today. Youth representation in government is key in this and must be harnessed from a young age. A key example that can be borrowed is that of the Liberian Children’s Parliament, now known as the Liberian National Children’s Representative Forum.

This space ensured children across Liberia were not just represented in national governance issues, but got to interact with leadership organs in government. It also gave rise to the youth leaders Africa needs, like the powerful human rights activist Satta Fatumata Sheriff, a dynamic young Liberian changemaker. Satta is making a real-time impact in Liberia today.

Another uncomfortable truth we must face is that we are at the beginning of the end of funding as we’ve known it. African governments must wake up, clamp down on corruption, bridge commercial alliances with each other, and begin to leverage domestic revenue.

Without prioritising this, we will not have the autonomy or sustainability needed to ensure that African youth can realise their potential.

The future of Africa isn’t on a distant horizon; it is unfolding right now. Every day, the youth of this continent are actively creating it. The world must catch up.

Why the world must pay attention

While income gaps in Africa are often discussed, age gaps between leaders and their people present an opportunity to discuss what a brighter African future should look like.

It is against this background that the Future of Africa Podcast, which I have the pleasure of co-hosting, was created. The podcast was developed to amplify African voices participating in global discourses and also align with generational views.

Each episode is a moderated, intergenerational conversation featuring a youthful changemaker alongside an elder statesperson or thought leader, ensuring a true exchange of ideas across generations.

It is a seven-episode series, with each episode bridging local experiences and global policy debates. The most inspirational idea to me is the nature in which the podcast reinvents youth not as passive beneficiaries of development, but as active creators of the future of Africa.

Moving from potential to power

To unlock the youth potential, there is a need to transform education systems to incorporate digital literacy, green economy, and entrepreneurial skills.

Youth-led ventures should also be funded. It is also crucial to provide the youth with a place at the decision table and make their voices heard on the policies that have direct influence on their lives and ambitions.

Governments, investors, and global partners face a crucial challenge: It’s time to move beyond discussing potential and start investing in these empowered individuals.

For years, with its low operating costs and strong profit margins, Joseph Karuga’s beekeeping and honey aggregating venture was a sweet business.

He was a happy entrepreneur. Then, as demand grew, shortages and unreliable supply left him frustrated – until he decided to build the solution himself.

Eight commercial banks raised interest rates in the year to August, placing them on a collision course with the Central Bank of Kenya (CBK), which has threatened daily fines on lenders that deny borrowers lower interest charges.

The overall weighted average lending rates of DIB Bank Kenya, Consolidated Bank of Kenya, Co-operative Bank of Kenya, Kingdom Bank, UBA Kenya Bank, Diamond Trust Bank Kenya, Premier Bank Kenya, and Access Bank Kenya have increased over the past year, according to fresh CBK data.

In a move to restore trust in financial reporting, the Institute of Certified Public Accountants of Kenya will launch the Unique Document Identification Number (UDIN) on October 2, 2025.

This transformative tool will revolutionise how audit opinions are authenticated-ushering in a new era of transparency, accountability, and professional integrity.

Every audit report issued by Institute of Certified Public Accountants of Kenya (ICPAK)’s 2,110 authorised assurance providers will now carry a 12-digit UDIN code and a QR code, both uniquely tied to that specific opinion. These identifiers will allow third-party users-procurement officers, regulators, banks, Saccos, and other institutions-to instantly verify the authenticity of any audit report. If a code is missing or invalid, the system will flag it, notify ICPAK, and trigger corrective action. Such reports may be rejected outright, restoring confidence in the audit process and protecting the public from fraudsters.

This innovation is not happening in isolation. ICPAK has benchmarked UDIN against similar systems used by professional accountancy bodies in India, Australia, South Africa, Nigeria, and Singapore.

Among these, India’s Institute of Chartered Accountants-the largest professional accountancy body in the world-stands out as a global success story.

Despite India’s vast geography and complex regulatory landscape, ICAI’s system has proven robust, scalable, and transformative. Kenya now joins this league of forward-thinking nations, embracing technology to uphold professional standards.

But the implications of UDIN go far beyond the accounting profession. This is a wake-up call to other regulated fields-law, architecture, engineering, supply chain, medicine, and beyond. Quacks have infiltrated nearly every sector, eroding public trust and exposing unsuspecting citizens to risk.

Take the legal profession, for example. Many Kenyans have unknowingly engaged individuals posing as advocates-only to discover, often too late, that they were never admitted to the bar. The consequences range from botched cases to lost property and shattered lives. A UDIN-style system, managed by the Law Society of Kenya, could allow the public to verify the legitimacy of legal documents and confirm whether a lawyer is duly registered and licensed to practice.

A simple code, searchable on a public portal, could be the difference between justice and deception.

Architects and engineers, too, face similar challenges.

Rogue practitioners have been known to submit fraudulent drawings, supervise unsafe constructions, or misrepresent their qualifications.

A document authentication system-anchored in professional registers-would empower clients, developers, and regulators to verify credentials before approving plans or releasing payments.

The future of professional practice in Kenya must be secure, transparent, and digitally verified.

Supply chain professionals, especially those involved in procurement and logistics, are increasingly relied upon to uphold ethical standards in public and private sector transactions.

Yet, without a way to verify their standing, institutions risk engaging individuals who lack the training, certification, or integrity required for such sensitive roles.

The medical field is another critical area. While the Kenya Medical Practitioners and Dentists Council maintains a register, a UDIN-style verification tool could help patients confirm the legitimacy of prescriptions, referrals, or medical reports-especially in rural or underserved areas where impersonation is more rampant.

ICPAK’s investment in UDIN includes a secure, user-friendly platform accessible via www.icpak.com. Users can simply enter the UDIN code to confirm the validity of any audit report.

The portal is prominently displayed for seamless access, ensuring that verification becomes a routine part of financial due diligence.

Following the launch, ICPAK will embark on a nationwide sensitisation campaign-engaging stakeholders across public and private sectors to ensure smooth adoption.

Forums, trainings, and regulator briefings will help embed UDIN into Kenya’s financial culture, making it a standard for accountability.

As the regulator of the accounting profession, ICPAK recognises that technology is no longer optional-it is essential. UDIN reflects our commitment to staying ahead of the curve, breaking barriers to trust, and empowering professionals to uphold the highest standards.

It is a digital shield against fraud, a gateway to credibility, and a testament to our resolve to protect the integrity of Kenya’s financial reporting ecosystem.

In adopting UDIN, ICPAK is not just launching a tool-it is making a statement. We are ready to lead, innovate, and transform. And we invite other professional bodies to follow suit.

My explanation of the size of the Mt Kenya economy on Radio Generations last week elicited many comments on Tiktok. My point? Perspective drives action.

For all our difficulties, Kenya has immense opportunities. We should not squander them, imprisoned by self-pity, recriminations, and name calling. Rather, leaders should reduce their daily political battles, and inspire Kenyans to greatness.